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How to Select a Revenue Management System
| Introductions
| Importance of next-gen technology and integrations
| RMS buying considerations
| Don’t just manage revenue, create a holistic strategy
| Optimize every booking with Open Pricing
| Q&A
Today’s Agenda
Jeff ZabinResearch Director,Starfleet Research
Eric StoesselVice President of Marketing,
Duetto
4
47% 35% 16%
Staff Managers Senior executives
Job level / role of survey respondents
Small hotels (including motels and bed &
breakfasts)
Large and full service hotels and resorts
14% 49% 37%
Midsize and limited service
hotels
Size / category of survey respondents’ hotel employers
About the Research
5
“…Demand-based pricing, which is commonly used in the lodging and airline industries, has already been adopted by other theme park operators in the United States, including Universal Studios, which will unveil a major Harry Potter-
themed expansion of its Los Angeles park next month. Movie theaters and sports teams are also experimenting with
similar pricing efforts…”
Disney Introduces Demand-Based Pricing at Theme Parks
New York TimesFebruary 27, 2016
A Brief History (and Future) of RM
Sell the right space at the right price at the right time to the right customer.
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97%Percent of survey respondents who view the need to import all historic booking, reservation, competitive and other relevant data into the Hotel Revenue Management solution as an “important” or “very important” success factor
RM Processing Automation
▍ Big data processing
▍ Advanced analytics
▍ Demand forecasting and pricing optimization
▍ Next-generation technology platforms
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Predicting the Future
FAST FACT: A mere $2 reduction in the average daily rate (ADR) for a 500-room hotel with a 75 percent occupancy rate would cost a hotel more than a quarter million dollars in lost profit in a single year.
▍ Historical data (e.g., occupancy, rates, bookings dates, rate codes, arrival dates, departure dates, revenue by day, etc.)
▍ Market-level data (e.g., competitive pricing, future flight demand, weather reports and geographical information)
▍ Web shopping data
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▍ What is the optimal price to charge in order to maximize revenue?
▍ What is the best possible rate the hotel can hope to get for a specific guest room?
▍ How can a hotel ensure that discounted price promotions won’t dilute revenue and profits in the long run?
Intelligent Pricing
9
Technology and Data Integration
▍ Integration with property management system (PMS) to provide for unified bookings, analytics and reporting
▍ Integration with point of sale (POS) systems
▍ Integration with modules and third-party systems
▍ Integration across OTAs and other distribution channels
10
93%Percent of survey respondents view the need to integrate revenue management activities with sales, marketing and guest services activities as an “important” or “very important” success factor.
Cross-Functional Integration
11
Top Benefits of Next-Generation RM
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Performance Measurement
FAST FACT: Banquet room revenue performance can be measured in terms of function space utilization, profit per available space/time (ProPAST) and profit per occupied space/time (ProPOST).
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85%Percent of respondents from large and full-service hotels who say that upgrading their Hotel Revenue Management capabilities has improved financial results.
Revenue Growth
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“How would you rate your company’s success in terms of utilizing hotel revenue management to improve financial performance?”
Midsize and Limited Service Hotels
21% 24% 17%
27% 32% 26%
Large and Full-Service Hotels
Very successful Successful Somewhat successful • Have utilized revenue
management for 8.5 years, on average• Have increased RevPAR by 7% on average• 25% have one or more revenue managers
• Have utilized revenue management for 10-plus years, on average• Have increased RevPAR by 9% on average• 75% have one or more revenue managers
Financial Improvement (by Hotel Size)
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Percent of respondents who say that one of the biggest benefits to be gained from Hotel Revenue Management is a reduction in time associated with traditional pricing tactics and getting pricing recommendations faster.
Time Savings / Speed-to-Decisions
91%
16
Cost Reduction
Percent of respondents who say that one of the biggest benefits to be gained from Hotel Revenue Management is a reduction in costs and resources associated with traditional pricing tactics.
82%
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Total Revenue Management
Midsize and Limited Service Hotels
Large and Full-Service Hotels
“Approximately how many
functions or departments across your property are
currently being administered using a PMS?”
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Suitability of core modules
Data processing capacity
Pricing management features
Channel management features
Cloud / on-premise deployment
Usability / Customizability
Technology / data Integration
ALow Medium High
BCDEF
Priority Level
G
Prioritizing the Buying Considerations
FAST FACT: The buying considerations are sure to depend to a large extent on a hotel’s specific needs and situation, including its category, size and typology (number and types of non-room revenue streams) as well as the team’s level of experience with RM.
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Uncertain ROI and financial upside potential
Proven ROI and predictable (and substantial) revenue outcomes
Manual calculation, or only partial automation, of pricing
and inventory recommendations
Complete automation of pricing, inventory and all other
recommendations
Increased room occupancy as the primary goal
Increased net revenue as the primary goal
From Legacy RM to Next-Generation RM
20
Manual distribution of rates to OTAs and other online channels
Automated channel management and channel
optimization
Revenue management applied to guest rooms only
Revenue management applied to all property revenue
streams
Revenue management separate from marketing and
sales activities
Revenue management integrated with marketing and
sales activities
From Legacy RM to Next-Generation RM
21
A Few Recommendations
▍ Select the right RM system
▍ Create a RM strategy
▍ Hire the right talent and resources
▍ Instill a RM culture (partner with the sales and marketing departments)
▍ Track and measure progress (using all relevant metrics)
▍ Think in terms of Total Revenue Management
About Duetto
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Founded byIndustry Leaders
World-ClassTechnology Development
Committed toCustomer Success
A few of our partners
Built in the CloudREMAP DATA
WITH NO RESETS
RAPIDDEPLOYMENT
SEAMLESSUPGRADES
NO SYSTEMMAINTENANCE
ZERODOWNTIME
DATASECURITY
RAPIDINNOVATION
ACCESS ANYWHERE & ANYTIME
NO HARDWARE
RegionalOffice
Owner Hotel Brand
PropertyManagement
A New Revenue Strategy
Operations
Sales &Marketing Distribution
RevenueManagement
Big Data = Better Data
Reviews & Social Media
Competitor Pricing Data
Booking & Reservation Data
Web Shopping Regrets & Denials
Weather
Air Traffic
Traditional Revenue Management
Traditional Revenue Management
BAR (Best Available Rate)
Promo Rate – 20% off
$16010% off
$180
$200
p
q Demand
Price
BAR Pricing = Lost Opportunity
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BAR 2$200
BAR 1$100
Retail/ Transient Rate Code: BAR
15%
With BAR Pricing comes static:| Room Type Differentials| Discounts / Offers
45% Occupancy75%
BAR 3$300
Traditional Pricing
Day 1 Day 2 Day 3 Day 4
$100
$150
$400
$200
CAPACITY
AAAPromo Rate
10%20%
✔✔
AAAPromo Rate
10%20%
✔✔
✖ AAAPromo Rate
10%20%✖
AAAPromo Rate
10%20%
✔✖
Open Pricing
Day 1 Day 2 Day 3 Day 4
$100
$150
$400
$200
CAPACITY
AAAPromo Rate
10%20%
✔✔
AAAPromo Rate
10%20%
✔✔
AAAPromo Rate
10%20%
AAAPromo Rate
10%20%
2%✔2%✔
5%✔
10%✔
Room Type Pricing
Day 1 Day 2 Day 3 Day 4
$100
$150
$400
$200
CAPACITY
SuiteKing BedDouble
+$100+$50
+$0+$75
Take Back Control – Open Pricing
| Independently price every single segment, offer and room type in real time
| Maximize revenue over high demand days and need periods
| Keep all channels open and benefit from the “billboard effect”
My Rate Pricing
0
$190 $181Jay
$199$175Mary Adam Retail
$99 $190Daily worth
$240Daily worthDaily worth
Your most profitable guests become direct customers for life.
Customer Success
Deep Revenue Management Experience(average 10+ years of experience)
Key Takeaways
| Deep experience in technology and hospitality
| Multi-tenant cloud structure provides continual updates and innovation
| Go beyond revenue management with true revenue strategy
| Better data provides better insights into demand and pricing
| Optimize every booking with Open Pricing
| Unparalleled support with deep experience
